By Marc Beauchamp
Performance Training Systems Inc.
Editor's Note: This article was first published in the Oct. 1, 2012, issue of Merchant Service Times. Reprinted with permission; all rights reserved.
In an arena that is as competitive as the merchant services industry, ISOs and agents are always looking for ways to add new revenue streams and limit merchant attrition.
Traditional product lines such as bankcard, debit, check and gift card processing are the mainstays for most agent offices. As our industry expands and grows, a wealth of new product options continues to be introduced in today's marketplace.
Many of these new products are innovative, increase efficiency and improve the merchant's bottom line. Some of the most popular offerings are multiple prepaid products, age verification, mobile solutions, POS systems, payroll processing, merchant cash advance programs, social media, mobile apps and many more.
Done correctly, adding a hit new product can make a major impact to your bottom line and reinvigorate your sales staff. Done incorrectly, a failed new product launch can be a disaster to profit margins, reputation and staff motivation.Exciting new products can assist agents in gaining access to new markets that previously were unapproachable. Before adding a new product line there are several factors that need to be considered:
One of the most important factors of any new product launch is the potential to impact bottom-line revenue. The product itself may not create a large increase in revenue but may open doors to new revenue possibilities. A product that opens new doors and creates significant ongoing revenue is a winner every time.
So ask some common-sense questions: What is the potential revenue this new product will create? Is it a one-time commission or will it provide monthly residual income? Will the new product create new possibilities to sell additional products and services? Will this product help retain existing customers?
You can have the best product in the world, but if the potential customer base is not large enough, sales targets cannot be reached. Ask yourself basic questions, such as:
It's key to think through the whole process in order to make sure all the bases are covered. Ensure there is a market and a proven need before offering any new product.
It is always important to know what the competitive climate is around any new business opportunity. At this time, I personally can't see any new product market being as competitive as the market we are in right now. Do your homework. Who are the major competitors? What are their pricing strategies? How much of the market do they have in your area? What is unique about their offering? Why do you think you can beat them?
Make sure you go into any new product launch with a clear idea of what your local, regional and national competitors are doing and how you're going to meet the competitive challenges.
Ongoing service is always a consideration for small to midsize sales offices. You should identify whether this new product or service implementation will require a large ongoing service commitment.
Ideal products should require little or no ongoing service by the sales office or staff. If you're adding a new product that requires heavy service, make sure the upfront and ongoing revenue streams justify the additional service work.
Another key factor is implementation. How hard is this product or service to install, set up or activate? Will additional in-house staff be required to support the implementation? Many products such as gift cards require artwork, customer approval, printing, delivery and installation. Are the benefits of selling this product worth the implementation work upfront?
Also consider how much of the workload the vendor or manufacturer is willing to take on to help implement, support and train your office in this new product launch.
New products can invigorate your sales staff and offer merchants cutting-edge solutions to their most demanding business challenges.
By having a varied product mix, you're presenting yourself as a solutions provider that adds value to your client base, not just another bankcard salesperson. Just make sure you do the proper footwork to ensure your new product launch is a home run and not a strike out.
Marc Beauchamp is a consultant and trainer for the financial services industry. He is author of "How to Survive and Thrive in the Merchant Services Industry," founder of the Bankcard Boot Camp, and offers a free monthly newsletter at his site, www.surviveandthrive.biz. He can be reached by email at firstname.lastname@example.org.
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